"To ensure the company's future competitiveness in an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger, while preparing an intense product launch campaign for several new vehicles, starting with the all-new CLA," Mercedes-Benz CEO Ola Kaellenius said on Thursday, presenting the carmakers’ annual results.

Annual net profit plunged by 28.4% in 2024, to €10.41bn. The group's operating profit before interest and tax (Ebit) came to €13.6bn, compared with €19.7bn a year earlier. Sales came to €145.6bn, down from €152.4bn in 2023.

Mercedes-Benz's product launch programme will begin in 2025 with the CLA, followed by a major upgrade of the S-Class in 2026, a fully electric GLC and C-Class, and a series of launches of electric vehicles and electrified high-tech internal combustion engines at its Mercedes-AMG unit. Overall, sales are expected to gain momentum after dozens of new or refreshed models are introduced to the market up to 2027.

The Stuttgart-based group plans to reduce production at its plants from 2.5m cars in 2024 to between 2m and 2.2m by 2027. The plan does not involve any plant closures in Germany, but does include relocating part of German production to Hungary "to take advantage of costs that are around 70% lower than in Germany", according to a press release.

For the manufacturer of luxury saloons, the aim is to "intensify efficiency measures at all levels" in the face of "difficult" markets, said Mercedes-Benz CFO Harald Wilhelm. The plan could include job cuts, with voluntary redundancy and early retirement schemes, sources at the company, which employs 166,000 people worldwide, the majority of whom work in Germany, the AFP news agency reported.

In December, its rival Volkswagen announced 35,000 job cuts and the relocation of production of its iconic Golf model to Mexico.

The entire German automotive sector, a pillar of the country's industry, is in turmoil, crushed by falling sales in China and the difficulties of switching to electric cars. Mercedes-Benz had embarked on an austerity programme from 2019 to reduce its expenditure by more than 20%, with a strategy focusing on the top end of the range. In November, the group said it wanted to cut costs by "several billion euros a year" in response to the difficulties in the global car market.

Read the original French-language version of this news report /